A version of this article was published in New Scientist on 3 December 2009.
The oil crisis is not dead, only sleeping, according to an emerging consensus. The price may have collapsed from last year’s all-time high of $147 per barrel to around $75 today, as the recession grinds away at demand for crude, but nobody expects that to last when the economy recovers. Analysts Goldman Sachs predict oil will cost $95 by the end of next year, while Deutsche Bank reckons $175 by 2016. The International Energy Agency (IEA), the OECD’s energy watchdog, forecasts a potential “supply crunch” around the middle of the decade.
Yet there is no shortage of oil – at least not underground. Many commentators attribute the $147 spike to the approach of peak oil – the moment when global oil production goes into decline because of geological limits – which should happen, so the theory goes, when we have consumed about half the oil that will ever be produced. And it’s true that by 2008 the world had consumed just under 1.2 trillion barrels of oil, against estimated original reserves of about 2.4 trillion barrels. But that’s just the conventional oil, which is only a fraction of the total.
Conventional reserves are dwarfed by a whole range of non-conventional oil resources, such as the Canadian tar sands, oil shale, and synthetic liquid fuels made from gas or coal, which according to the IEA expand the total oil resource to 9 trillion barrels (see graph). And so far the non-conventionals are almost entirely untouched. So how could there possibly be an oil supply crunch, let alone peak oil, any time soon?...